Broad legislation to cope with changes wrought by a revolution in communications technology -- including a much smaller role for the federal government in telephone and broadcast regulation -- was proposed yesterday in the Senate.
Following intitial work in drafting a rewrite of the Communications Act of 1934, which has been in progress for two years on the House side, Sen. Ernest F. Hollings (D-S.C.) offered the first comprehensive Senate bill -- and fashioned the proposed rewrite somewhat more modestly than versions that have appeared on the other side of the Capitol.
Declaring that "times are changing," Hollings said yesterday that natural monopolies and economy of scale are words of the past in the business of communication. "Competition and diversity are ideas of the future," he added.
To those ends, the Senate Commerce Communications Subcommittee chairman proposed that American Telophone & Telegraph Co. be permitted to engage in new data communications businesses, that owners of broasdcast stations be provided with licenses that last longer and that commercial broadcasters pay fees of some $80 million a year to use the public's air-waves.
Hollings' legislation is different in several major respects from a House rewrite of the Communications Act introduced last year by Rep. Lionel Van Deerlin (D-Calif.), who heads the House Communications Subcommittee.
For example, the earlier House bill also would require commercial broadcasters to pay fees, but the money would be earmarked to underwrite public broadcasting. Van Deerlin's staff is studying the fee proposal and will make a decision soon on whether to incorporate the plan in a rewritten version of the House legislation to be reintroduced later this month with some changes from last year.
Critics say the main problem with the 1934 act -- which gave the Federal Communications Commission its current oversight of interstate telephone service and broadcasting -- is that it does not deal with such modern developments as microwave transmission, cable television and satellites.
Among the Hollings proposals to eliminate federal regulation in these areas, now subject to growing competition compared with the Depression era, are:
Television stations would be given five-year licenses compared with three and radio owners would be granted indefinite licenses subject to an annual audit by the FCC of 5 percent of the approximately 8,700 radio stations.
A two-tier system would be established for the domestic telecommunications business -- one group of companies or subsidiaries in competitive markets with no government regulation, and a second group of firms engaged in businesses which include natural monopolies, for which FCC regulation would be continued.
All long-distance telecommunications service would come under federal regulation, and a 1956 Justice Department consent decree with AT&T would be modified to permit entry into businesses previously barred, with safeguards to prevent market dominance.
A new non-profit management corporation would plan and manage for the U.S. all international communications facilities and would represent this country in international communications agreements, replacing the Communication Satellite Corp.
In cable television, onus of proving harmful competition to local broadcasters would be placed on such commercial broadcasters, and telephone poles would be open to any user for standard fees.